Marketing Strategy

As mentioned in one of our previous blog posts (describing some of the major trends to be expected in 2018), eight out of ten marketers believe content marketing is a key constituent of marketing success, yet only three out of ten within the same sample had a content marketing strategy in place. Setting a strategy isn’t hard, but it can be daunting to know where to start when it comes to working out what is needed – by whom, in what format, how often, why, and so on. That is why we recommend the use of the long-established SMART goals methodology (Specific, Measurable, Attainable, Relevant and Timely). For a bit of fun, in this article we have adapted this approach to fit in with some famous lines of verse from arguably one of England’s finest content creators, Rudyard Kipling.

‘I keep six honest serving-men: (They taught me all I knew) Their names are What and Where and When And How and Why and Who’

Answer these six questions in relation to how you require your content marketing efforts to benefit your organisation as a whole, and you will have gone a large way towards setting a strategy. Unlike Kipling, though, it seems logical to address first the question of ‘Why?’ rather than as Rudyard has positioned it towards the end of the ode. Marketers believe content marketing is important, but why is that?

Why do we need content marketing?

The answer to this question of why we need content marketing is linked to how we have seen marketing develop with the rise in the importance of all the digital channels. Instead of aiming for a transactional relationship where one party sells and the other buys, and that’s pretty much it, marketers across the board are now aiming for deeper, lasting relationships. With the advent of social media and automated marketing, the use of which will only become more and more sophisticated as artificial intelligence picks up much of the legwork previously delivered by humans, marketing messages are becoming far more tailored and personal. Instead of using the blunt instrument of traditional mass marketing, customers can be wooed with messages tuned to their specific likes and dislikes. Therefore, rather than a sale being the ultimate goal, a long-term – ideally lifetime – relationship between brand and consumer is the new aim, as per our recent bowtie marketing blog.

These new media channels are already swamped with far too many intrusive sales messages, but savvy marketers know that what people really want is excellent quality information and – most importantly – not to feel sold to. Sometimes, that information will be specific to a product or service, but often it is information relevant to a problem that a customer has and wants to solve or a need or desire that they want to satisfy. Consumers trust people – and brands – which they perceive, to be honest, transparent, reliable and helpful. They also trust independence, which is why consumers typically give more credit to reviews by peers in preference to a brand’s official marketing output and explains why YouTube stars (aka vloggers) have quickly become huge influencers. In such a world, brands that build relationships by listening to and solving their customers’ problems will build the deepest relationships. They will have consistent, coherent narratives that their customers buy into – think Dyson’s championing of British inventiveness, or Aldi’s assertion that the named brands people love are good (cleverly leveraging the building of those brands) but their own brands are just as good, and much cheaper. The ultimate prize is to have such a good relationship with your customers that they do much of your marketing for you. Content marketing helps to deliver and/or amplify brand trust.

So that’s the ‘why’ at a broad level. In terms of a plan of attack, it’s worth asking the question of your own organisation. Why should your business have a content marketing strategy? Establish clear objectives – website hits, positive reposts, click-throughs leading to sales, etc. – for what you want to achieve in terms of engagement with prospects and customers. And once you have set a strategy down and are producing content, make sure you understand how each piece fits in with the strategy and why it will help build relationships with your target audience – this is also why it is important to map out your stakeholder needs and to have a good understanding of segmentation, so you can generate helpful personas and profiles for different customer groups.

HOW will your content marketing contribute to business objectives?

Answering this question is where the meat goes on the bones. Unless you have a clear idea of how you are going to attain them, strategic goals are just so many fine words. It requires a deep understanding of your own business and of your market. If either of these is missing, gaining such understanding should be an essential first step within the strategy. What are the key products or services on offer, and where do they sit in the market? Do all consumers have the same perceptions? A brand is often in reality far more a matter of how others view it than how the organisation would like it to be perceived. How will you build on your brand’s position, or change perceptions if this is one of your aims? An honest assessment is required to identify where strengths and weaknesses exist, in both your own organisation and within competitors. Which are the products/services that sell, and why? Analyse sales figures and other available data to form a picture based on objective information.

Each piece of content produced should advance your progress towards your goals and have a clear purpose – growing your customer database, raising awareness, provoking interest, building relationships, improving SEO benefits, generating sales. Quite possibly, each post will help boost several of these objectives at the same time. Each should carry a consistent tone of voice and add to the story of your brand; decide beforehand how your story will be developed as each additional item is posted, and how you will vary it according to your relationship with an intended recipient. The messages going to customers who have little or no awareness of your brand will be very different from those who are regular buyers or even advocates. They should also be adapted according to the segment (or – in the case of B2B – industry) being targeted, and perhaps also according to their location.

Also, be pragmatic. A successful content marketing strategy does not need to be that sophisticated to be successful. There are some key considerations you need to tick off if you want to have an impact – your content must be relevant, informative and interesting to your primary target audience. The important thing about content is that it hangs around for a long time in the eyes of the search engines if it is hosted in the right way. This is why SEO optimisation is so important. A well-optimised piece of content can appear on the first page of Google almost immediately, driving high quality traffic to your website.

WHERE will you post your content?

Not so long ago, ‘Where?’ would just have been a matter of your desired geographical reach, but now it applies to a host of digital platforms too. Which video platform will you use? YouTube is the obvious, but not only, choice. Facebook is still massive, but maybe Instagram might work better. LinkedIn is of course a big player in the B2B world. Once a piece of content is created, it is easy to modify it for a variety of platforms – the modifications and postings can even be automated using marketing platforms such as Hubspot, Marketo and the like. Of course, it will usually appear on your website too, and well-constructed emails still register great response rates – this year, a strategy should include measures to ensure your mailings are set up to comply with GDPR, which lands in May. We will be writing more about the implications of GDPR in a future blog.

WHAT content will you produce?

Set out what you want to post and when (presupposing, of course, that there is a satisfactory answer to the question ‘Why?’!). ‘Content’ embraces a multiplicity of different formats. All content must, of course, be engaging, so be aware of what your audience tunes into. Video has become one of the most effective mediums and this trend is sure to grow in 2018, so ignore it at your peril. It is of course just a part of a media mix that also includes blogs, whitepapers, webinars, newsletters, and so on.

WHEN will you produce your content?

When you post could be determined by when sales campaigns are planned, or in response to changes in market conditions, such as new laws coming in, a new craze, or even the weather – suppliers of fencing increase their activity in the wake of gales! If your market is affected by specific changes like this, your strategy should include the need to have content ready to roll as soon as opportunities arise.

WHO is involved in the strategy?

‘Who’ is the last of the Kipling questions and, in this context, it applies both to who within an organisation is going to be responsible for producing the content, as well as who the target recipients are.

Regarding the former, the strongest brands spread the production of content as widely as possible. The more employees who are involved in the process, the more authentic the picture consumers build-up of that company. ‘Marketing’ may be the primary responsibility of a specific group, but every employee is a brand representative whenever they interact with a customer. Obviously, guidelines are necessary to ensure the brand’s reputation is safeguarded and that a consistent message is maintained, but the more that individuals can ‘be themselves’ within such parameters, the more interesting their contributions will be. For example, ordinary members of staff don’t need to be great actors to take part in videos – these days viewers are likely to be more impressed by honest and credible amateurs than by slick professionals.

When it comes to audiences, we’ve already said that messages should be tailored to the people they are intended for. As well as identifying the intended recipients for your different messages, ensure content is focused on appealing to real individuals rather than abstract groups by creating realistic buyer personas.

Six honest serving-men

This is just one approach to creating a strategy, but it’s one that works. The six questions can be asked at every level, from the initial forming of the overarching strategic goal, through the subsidiary goals and tactics to use, right through to the creation of each piece of content. If each element of your strategy addresses ‘What, Where, When, How, Why and Who?’ you can be pretty confident you have covered all the bases. The only thing to bear in mind is to try to find ways to measure the effectiveness of your campaign on an ongoing basis against pre-determined goals. As a general rule, “if you cannot measure it, it’s not worth doing” – but of course measurement can be defined in any number of ways. It is not all about instant sales. It could be about building up long term value in your brand and/or protecting your position in the marketplace against aggressively advertising competitors. The good news is that you will tend to have the last laugh in this respect, as long as you create a well-thought out content marketing strategy that includes reference to search engine optimisation and social media marketing.

It’s a natural time of the year to create plans and to take a broader look at the factors that are likely to affect our businesses in the coming year. In this piece, we set out some of the likely marketing trends in 2018 that either will or could – and in many cases, should – fundamentally change how marketing is delivered. To this end, we have trawled the internet to see what a wide variety of marketing experts across the globe are predicting to be the most disruptive influences in the coming year.

A word of warning. Not all of the following activities are going to suit every business, and we are of course looking at some game-changing opportunities that come with a high cost attached, as well as perhaps only providing marginal gains for some organisations. The most important thing to bear in mind is to look at where you are in terms of your marketing plan and to invest in the right strategies for your business. For instance, before you do anything else, you might need to focus on your brand proposition, or on making sure your website and essential sales support tools (such as your corporate presentation, brochures, videos etc.) are up to spec. That being said, whilst this “first things first” approach is important to bear in mind, it never hurts to have an overview of the broader picture, perhaps as part of – say – a three-year marketing vision whose aim is to transform your business into a key market player by 2020.

Technological developments in marketing

As in so many fields, the overriding trend in technological developments in marketing is the increasing use of software tools to automate tasks and processes that were previously handled by people (or which never existed in the first place because it was too complex and time-consuming to do so). Thanks to the internet and its numerous digital spin-offs, marketing is now going through its own version of the mechanisation previously experienced in manufacturing. And because of the nature of the world of IT, change is happening at a much greater speed. This year, words like ‘dynamic’ and ‘agile’ are key front-of-mind motivators for forward-thinking marketers. In short, developments in marketing technology have led to a significant move forward in the holy grail of marketing – one-to-one relationships with customers at every stage in the sales cycle, from ‘target suspect’ to ‘loyal ambassador’.

Therefore, it is no exaggeration to suggest that the digital revolution has led to a transformative revolution in thinking. Not long ago, mass marketing was undertaken on the rough principle that if you broadcast a message often enough to as wide an audience as possible, some people, sometimes, were bound to respond. Marketing can now be far more targeted and personal, with a far greater chance of receiving a positive outcome – assuming that your customer/prospect data has sufficient depth and quality and that you have the processes in place to communicate appropriately at every step in the cycle (think AIDA – create awareness, establish interest, emote desire, provoke action). Rather than the aim being the completion of a successful transaction – moving customers from the top to the bottom of a notional sales funnel – the approach now for a growing number of businesses is to examine the relationship between seller and customer at every stage in the process. The first sale is merely one point on a continuum (with the sales funnel re-rendered by what we refer to as the bow-tie marketing model) where, having been converted from prospects to customers, deeper relationships are built, with some customers becoming advocates and influencers over a period of time. 2018 will see more companies adopting Customer Lifetime Value as the key benchmark by which the success of their marketing is measured, and Customer Experience Marketing (which 68% of marketers say is the basis of their current marketing plans) as the strategy for maximising it.

This is true for B2B marketing too, where Account-Based Marketing works on a company-by-company basis. As well as creating marketing collateral specific to key accounts, a growth in Hyperlocal Focus is anticipated. Thanks to the democratising effect of the web, small companies can now compete with the big boys on a more level playing field. Expect the big boys to fight back, though – data-crunching and marketing automation gives them the ability to target customers by micro-region as much as by any other parameter.

This is perhaps a moment to consider the value of data. You may well have heard about Big Data. Well, the truth is that many businesses can benefit their bottom line or corporate value simply by putting systems in place that enable them to capture raw data today so that they can build highly successful marketing automation platforms in future. In fact, the value of data-rich organisations can be so significant that it is definitely worth bearing in mind if you have an exit strategy in place for a few years from now.

Implicit within the concept of creating long-term relationships with customers is the delivery of a service genuinely attuned to the customers’ needs, along with the establishment of trust. This, in turn, requires sellers to be transparent, which in any event makes sense in a world where customers soon raise red flags on social media in response to poor service or insincere practice. As Amazon CEO Jeff Bezos puts it “It used to be that if you made a customer happy, they would tell five friends. Now with the megaphone of the internet, whether online customer reviews or social media, they can tell 5,000 friends.” In fact, it is just as realistic to suggest that it will be seen by 5,000,000 people in certain circumstances. Whatever the number, the inference is obvious. Like it or not, everyone has an opinion these days, no matter how ill-informed it might be, and there are many channels by which people can and will express it (often emotionally rather than rationally). To this end, a strategic brand proposition may be required that is understood, admired and adhered to by all members of staff. We cannot emphasise highly enough how much competitive advantage can be gained by forward-thinking organisations that are driven by a genuine philosophy of wishing to deliver an ethical proposition based upon a vision and values of real merit and worth. Just as negative feedback can hurt a company, so can positive commentary help it.

Mobile First is fast becoming an established principle, which more and more companies will adopt as an essential part of the website development process in the coming year. Increasingly, mobile devices are becoming the main route to access information online, and mobile apps far exceed websites in delivering that access, accounting for an astonishing 89% of mobile media time. It makes sense that businesses plan their communications with this trend firmly in mind. Web designers are now using Progressive Web Apps that are optimised for viewing with any browser and on any device – but first and foremost on mobiles. Push Notifications and Chatbots – automated online assistants which assist website visitors through audio or text dialogues – are also set to become more familiar as developments in Artificial Intelligence increasingly move out of the world of science and into the commercial arena. (If you’ve yet to come across a chatbot, check out Skyscanner’s, which helps visitors find live flight prices and destination ideas.)

Augmented Reality (AR), where virtual information is merged with the real world, is also tipped to grow. While some early examples enjoyed limited success (e.g. Google Glass), the speed with which the Pokemon Go craze took off showed how quickly people can engage with it. In a more traditional commercial setting, Ikea Place is an AR app that allows users to see how furniture will look in their own homes. Expect many more companies to develop their own equivalents in 2018.

Voice Command is also growing fast – it’s predicted that, in just a few years, the majority of online searches will be carried out using voice, aimed at personal virtual assistants (Amazon’s Alexa is selling fast) as well as Google and other search engines. In fact, savvy companies are already developing Alexa-specific apps, collectively known as Alexa Skills, including Ask Purina, which helps consumers discover which dog breed best fits their lifestyle.

Content marketing strategy

Besides being technically innovative, Ask Purina illustrates another vital element of successful marketing strategies, which isn’t new but which will become ever more important: content marketing strategy. Consumers want useful information that helps them to make better-informed decisions, and they show strong loyalty to brands that supply it consistently and engagingly through storytelling – building a coherent narrative around a brand and its purpose. Apple walked off with the accolade of top storytelling brand in the UK for the fifth year in a row because of its consistent narrative, which projects core values of simplicity, creativity and ease of use. Apple builds excitement in their storytelling by continually launching new products, keeping the brand front of mind and encouraging anticipation amongst their fans.

If storytelling is the principle, the fastest-growing means for delivering it is video – five billion videos are watched on YouTube every day. Not only can we expect to see quality and invention to rise across the board in 2018, we also strongly suspect that more videos will be delivered live. Research suggests consumers prefer live streaming to any other form of receiving information about products, and there seems to us to be genuine substance to this claim. Land Rover staked an early position in the field by being the first UK car manufacturer to stream live test drives (and its One Life page also has great storytelling going on). Live video is of course not just about the video itself. Social media can be used to build up real anticipation beforehand, and to spread the messages conveyed in the video afterwards. This also provides long-term SEO benefits too.

Even with all the new options available, email is still cited by many marketers as the most productive component of their content marketing strategies. Thanks to data becoming ever more granular, and with the growth of marketing automation, we already have the ability to create different messages to engage with different recipients, and automatically generate responses when recipients engage with your business. Don’t forget, though, that GDPR comes into being in May 2018 and applies new rigour to how data is obtained and handled. We will be talking more about GDPR in one of our upcoming blogs, as it is crucial to every business to understand their obligations when it comes to collecting data from about now onwards…

Content marketing is huge – research by the Content Marketing Institute found 8 out of 10 marketers believe it is key to success. Yet the same research found that only 3 out of 10 of them have a content marketing strategy in place. The conclusion is clear – having a content marketing strategy in place will give any company a significant advantage over many of its competitors. Perhaps a reason for some organisations not having a content marketing strategy in place is that they lack the resources to produce a steady flow of great content internally. This is no excuse. Companies in this situation should consider outsourcing and automation (it’s estimated around 20% of business content in 2018 will be machine-generated). Whatever way content is produced, it should be relevant and interesting, informative as opposed to salesy, and provoke the appropriate emotional response (laughter, empathy, sadness, happiness, security, etc.).

Social media marketing

It’s still a big thing of course, but the nature of social media marketing has been shifting. That being said, talk of Twitter’s impending demise is a ridiculous distortion of the truth. And Facebook, in conjunction with Instagram, is going to remain a key player in 2018. We will also see LinkedIn grow. Content repositories like YouTube, SlideShare and Google + are also going to remain important social media tools, with huge SEO benefits for those businesses that use them effectively.

Ever improving information about how people engage with businesses’ social media activity also means better metrics. Vanity metrics – likes, followers, etc. – are distorted by the number of accounts actually operated as bots, and the old maxim ‘All publicity is good publicity’ doesn’t necessarily apply in the social media world. Marketers will use more sophisticated metrics that indicate overall sentiment based on reviews, click-throughs to the website, time spent on site, newsletter sign-ups, sales conversions, and so on.

The rise of Social Influencers will continue – consumers trust their independent reviews and advocacy of favourite brands. While interacting with influencers can lead to some of the most powerful marketing a business can get, it only works if the influencers themselves continue to be genuinely independent. We’ve all seen news stories reporting how quickly an influencer loses credibility if they are perceived by their followers to be in the pockets of the brands they recommend – it’s back to trust and transparency again. And it isn’t only those influencers that have huge numbers of followers who are useful – micro-bloggers can carry significant sway in specialist niches. Influencer marketing is going to be huge in 2018. One thing that nobody talks about is that business owners and senior managers can also become influencers. In fact, anyone can. If you are knowledgeable and passionate about what you do, then you are better placed than anyone to become an influencer. We see forward-thinking individuals who wish to improve their Klout score proving this prediction in 2018. Klout is a measure of your personal influence in the online space, with the lovely strapline, “Be known for what you love”.

For B2B marketers, LinkedIn’s importance looks likely to grow substantially this year. LinkedIn has developed features (e.g. InMail Analytics) with the deliberate aim of making it the clear platform of choice for engaging with other companies.

Whether B2B or B2C, the companies that enjoy the greatest success with social media will be those where its use is embedded across their organisation. Its reach will be wider and deeper the more touchpoints there are between employees and customers.

Other marketing media

Do not forget that many other forms of marketing media will, of course, continue to play their part in 2018 – SEO and paid search, in particular, come to mind. But so will traditional forms of media, such as advertising, events, sales promotion, PR and channel incentives. Trends indicate change opportunities and disruptive growth, but they may not be right for your organisation, so it is important to take a rational view across the board when creating your sales and marketing plans for the year ahead

However, we believe the areas discussed in this article will unquestionably see the fastest evolution and most disruptive game-changing activity during 2018. In other words, this is potentially where more planning and strategic resource need to be allocated to ensure that you are making the best use of the range of tools and techniques available.

Glossary

Here is a glossary explaining some of the key items mentioned in this article in a bit more detail. If you would like to know more, just copy and paste each phrase into a search engine like Google.

Account-Based Marketing: a strategic approach to business marketing in which an organisation considers and communicates with individual prospect or customer accounts as markets of one.

Artificial Intelligence: where a device perceives its environment and takes actions that maximize its chance of success at some goal, mimicking human intelligence.

Augmented Reality: superimposes a computer-generated image on a user’s view of the real world, thus providing a composite view.

Big Data: extremely large data sets that may be analysed computationally to reveal patterns, trends and associations, especially relating to human behaviour and interactions.

Chatbots: an automated program designed to simulate a conversation with human users, especially over the Internet.

Customer Experience Marketing: puts the customer at the centre of marketing. Information the customer wants is provided – not sales talk.

Customer Lifetime Value: a prediction of the net profit attributed to the entire future relationship with a customer.

Hyperlocal Focus: marketing targeted at a certain region, such as shoppers in a certain city or within a certain distance from a business.

For many years, the idea of the sales funnel (or sales pipeline) has been accepted as a core principle in formulating successful marketing strategies. But, whilst it is a valuable concept in itself, it fails to cover the full scope and nature of the most valuable interactions between a business and its customers. The approach is primarily focused at considering how new customers are acquired, without any recognition of the fact that business from existing customers is typically substantially more valuable, and invariably significantly less expensive – according to many industry experts by a multiple of seven to ten. However, another core principle of marketing is to optimise customer lifetime value (CLV), which outlines the means by which profit is earned over the duration of a customer’s relationship with a business. A new model is suggested as a more valuable analogy that combines both these elements, and which we refer to as the ‘Bowtie Marketing’ model.

Sales funnel

The idea of the sales funnel is that the people you market to move through successive stages down through a pipeline. The AIDA model explains the process well. At the outset – represented by its widest part– there is awareness amongst potential customers that they have a want or a need, and as a result of media activity (such as pay per click (PPC) advertising, social media promotion, email marketing or search engine optimisation (SEO), for instance) have become aware of your business. The next stage in the process is an expression of interest, where the customer makes contact with you in some appropriate manner, and starts to ask questions and/or request additional information, after which comes their desire to buy, which then leads to action in the form of a purchase of your product or service. And so the bottom end of the sales funnel is reached.

The entire global population can conceivably enter your funnel. However, it is normal to create customer segments and personas that allow you to target your marketing efforts towards suspect customers who display common types of demographic and psychographic traits that you feel represent your target market accurately. It is only when suspects make contact, such as by visiting your website, that they turn from a suspect into a prospect. The further down the funnel they go, the warmer a prospect they become.

The job of marketing is first to get as many people as possible into the top of the funnel, then, in turn, to persuade as many of them as possible to move through each successive stage until they make a purchase. It, therefore, starts with a marketing strategy to secure the attention of the greatest possible number of potential customers. Within the overall population, likely groups of buyers are identified through customer segmentation, and messages refined with the help of customer personas. A suitable mix of marketing tools is then deployed: an appealing website (optimised for search engine using SEO), social media, email, PR, digital advertising, conferences and exhibitions, etc., according to your organisation’s specific needs, articulated in your business plan and sales forecasts. This marketing activity might be backed up by tactical initiatives designed to be specific to prospects moving down through the various stages of the funnel.

We often talk to our clients about customer touch points – be they digital or physical in nature – that occur during the sales process, and how crucial it is to deliver a consistent brand experience at every single point of contact. The only way to achieve such consistency is to have a clear brand proposition in place so that an organisation’s sales and marketing efforts reflect its desired vision and values. This ensures that all communications encompass the right attitude and tone of voice and that behaviour is in line with agreed principles and standards.

Customer lifetime value (CLV)

A customer who has made an initial purchase can be thought of as an adopter. The marketing need here is to affirm their decision to buy, and perhaps to seek information that will enable the business to refine its marketing efforts further in future. It’s the perfect opportunity to request feedback about their buying experience and to try and find out what swung their decision to buy the product from your organisation. Think about how successful internet businesses such as Amazon and eBay follow up every sale with a thank you message or a congratulatory note, followed by a request for a review of the purchase and/or feedback on the brand experience. The good news is that you can do the same, easily and cheaply, using today’s modern technologies. The primary investment is in planning and set-up. After that, it is all about ongoing maintenance and management.

If adopters are nurtured, some will become loyalists, returning to make additional purchases. These could be repeat sales of the same product or service, the cross-sale purchase of complementary products or services, or upselling them to a better solution or package to suit their needs. Their loyalty could be encouraged and rewarded through offers unavailable to the broader public, such as are offered by Tesco to their Club Card customers, for example. As a result, some of these loyalists may become advocates, which means that they are happy to give favourable mentions to the business and its products in their interactions with others – interactions which are amplified enormously these days through social media sharing. At the righthand edge of the bowtie model are your ultimate customers: ambassadors. These are super-advocates who actively promote your brand, their opinions being widely shared and respected, even to the extent of going viral. They are as valuable to your business as you or any of your colleagues, perhaps more so: independent voices who eulogise about your products and services to their friends and online followers, all of whom are more likely to trust their judgement than a clever marketing campaign. You can ask your customers to provide referrals at this point in the model, as long as it is perceived to be a win-win scenario for both the referrer and the referee. As you would expect, the number of people in each group gets successively less further to the right of the bowtie knot you go. On this side of the bow, the widening out represents an increase in the relative value of individual customers.

Bowtie marketing

The bowtie marketing model doesn’t dispense with the sales funnel, nor does it disregard customer lifetime value (CLV). Instead, the funnel is turned on its side and a second funnel to represent CLV marketing is added as a mirror image. The bottom of the sales funnel becomes the knot in the centre of the bowtie, which is the point at which a new customer first makes a purchase. Everything to the left of the knot is as it was for the funnel, but to the right is a description of the ongoing relationship between you and your customer reflecting the CLV proposition.

While the sales funnel is focused on gaining and converting as many new customers as possible on an ongoing basis, the bowtie model puts equal emphasis on developing relationships with existing customers. This is surely common sense, given how much more expensive it normally is to win new customers against making further sales to existing ones. But all around us are examples of businesses who seem entirely focused on the former. How often have you seen a company offer better deals to new customers than to existing ones? In the service sector particularly, where by definition an ongoing relationship of some sort between the provider and the customer exists, rewarding loyalty seems to have gone out of the window (think car insurance or heating supplier, for example). Consumers are urged by independent experts to leave the poor value deals they’re getting from their existing provider in favour of sign-up incentives on offer elsewhere. They may check with their existing provider, to see if the better terms available elsewhere can be matched. Surprise, surprise, they often can be, but this begs the question: “Why didn’t you offer me this deal in the first place…?!”

This type of scenario is indicative of great attention being paid to the sales funnel by many organisations whilst lip service is being paid to dealing ethically with existing customers – in fact, the aim seems to be to fleece rather than to flourish. What is obviously needed is a more holistic approach, as is suggested by the bowtie marketing principle. At least as much attention should be paid to a business’s churn rate – the rate at which it loses customers – as on sales figures, to ensure that all the effort expended on winning customers in the first place is optimised down the line.

Ultimately, customers stay with businesses they trust to offer not just good products or services, but also to have their best interests at heart. Genuine relationships always transcend the mere transactional to become emotional ones, where a customer feels the brand is integral to their lives (you probably know people who profess they would cease to function without their iPhone…).

In some ways, the bowtie marketing model harkens back to the days when personal service was paramount (ironically enough, to a time when more people wore bow ties…). With the advent of mass production and mass marketing, perhaps the personal connection was lost – in truth if not in intent – and perhaps the sales funnel was the best model available to many organisations. Now, thanks to exciting new technologies, we can take advantage of CRM systems and marketing automation to genuinely connect with people as individuals. This enterprising approach to business is not just for the likes of Amazon, Apple and eBay – the bowtie marketing model is an option for every single organisation around the world – and that includes SMEs and start-ups too.

We often get asked, “What is customer segmentation….?” alongside the follow-up question, “… and why do we need it?”.

Well, the key to successful marketing lies in understanding who your customers are and what makes them tick. It sounds obvious, but it is worth stating that the more you know about your customers, the deeper and more durable your relationship is likely to be with them. But, given the millions of people in the UK who could potentially be customers of yours (not to mention the billions in the world beyond), how is this achieved? Which of them should be prioritised to achieve the greatest success, and how will that affect your sales and marketing strategy? There are two areas to understand when it comes to analysing your customers – customer segmentation, and customer personas. This article is primarily about customer segmentation, as this is perhaps the most important element to focus efforts on in a strategic sense, but it also looks at how customer personas – developed from data obtained from segmentation – can be constructed to give valuable insights when constructing tactical marketing campaigns.

At the highest level, pretty much every business will – consciously or otherwise – have a customer segment in mind when they start out; the people they think are most likely to be potential buyers for their products. Clearly, a company selling pet food will not expect any interest from people who don’t have pets, so a large section of the population will be right outside their sphere of customer segmentation from the word go. Proper customer segmentation really kicks in at the next level.

Demographic data

There are still millions of people who own pets, but they can be sub-divided into different segments based upon demographic data attributes, such as; age, gender, marital status, income, education and occupation. To a great extent, segments can be created using personal intuition and insight about the type of attributes customers are likely to have. It’s obvious that products aimed at teenagers need to be marketed in a very different way to products aimed at people in retirement. Where a product might appeal to both groups, segmenting them helps to establish if either group is more important, and to what degree and in what ways.

However, relying on gut instinct to create segments is somewhat dangerous – it may say more about the prejudices of the person creating the segments rather than anything useful about the people within them. Instinct may lead to incorrect conclusions about which segments are truly important, and about the particular marketing style that people within those segments would respond to. Researched segmentation from external sources based on objective data rather than subjective opinion is much more informative and reliable, although internal processes such as workshops and brainstorms can also help to paint a good picture.

For established companies, the initial data required to create segments lies in their own customer base. After all, these are people who have already bought, or expressed an interest in, the products or services on offer. Analysing an existing customer base can reveal a wealth of valuable information.

Often, a relatively small proportion of customers will be found to generate a high proportion of turnover – and, much more importantly, profit. It may become clear that many of these customers share characteristics, and that they represent a clearly definable segment; those shared characteristics can point towards a successful way of marketing to them in as effective a way as possible. It also identifies the potential attributes of prospective customers that fall within this segment, and at whom marketing awareness activities could be aimed.

Even for a business starting from scratch, there is a lot of decent quality data available. In the UK, a useful free source of information is the Office for National Statistics (ONS), whose website provides a wealth of data that shows how the population breaks down according to a whole host of factors. This can be a useful basis for starting to create meaningful segments.

Usually, though, a starting point is all this high-level data can provide. The data is demographic – it describes statistically which parts of a population fall into different groups based on objective information such as age, gender, income group and the like. While it helps answer the question ‘who?’ it doesn’t explain how they think or what motivates them to act as they do. This is where psychographic data is required.

Psychographic data

As its name implies, psychographic data is concerned with how customers think and behave: their values and views, motivations, what they respond to well, what turns them on or off, how they spend their free time, and so on. In this way, we move beyond the rational and into the emotional. The art of persuasion is a crucial marketing factor in winning sales that is often undervalued. Marketing needs to speak to people’s hearts as much as their minds. This is why psychographic data is just as important as demographic data. In fact, there are studies that indicate that most people make up their minds about the house they are going to buy in just a few seconds. This is the biggest purchase they are likely to make in their lives, and it is almost entirely emotional in nature. Ditto cars, jobs – and maybe even spouses…!

Gathering this information can be accomplished in a variety of different ways.

Gentle questioning of customers as they buy should be part of every sales process. It could be done face to face by the person making the sale, or via an online questionnaire after each purchase. Finding out why a customer is making a purchase, or considering one, will open up potential insights to making further sales in the future, either in the form of repeat business from that customer, or from others who share similar motivations.

The information gathered from day-to-day interactions with customers can be augmented by specific research involving focus groups and one-to-one interviews, where detailed insights into why people behave the way they do can be obtained. These days, the research can often be handled remotely, through online questionnaires or by setting up ‘virtual’ focus groups.

The internet has also introduced the concept of ‘Big Data’. With the numbers of people now browsing, buying and interacting online, an astonishing amount of data is gathered by the likes of Google and Experian as a natural biproduct of their services, as well as specialist data companies such as Zizo, Esri, Intel, etc. This data can be analysed and collated to create detailed segments showing behaviours across a wide range of different activities. This data can be cut and sorted into so many combinations, they are virtually infinite: if your products are particularly popular with people in tower blocks who use social media while travelling on trains, support environmental causes and enjoy oriental food, the data can tell you.

Collecting as much psychographic data as possible will help you focus your marketing efforts and spend on the most likely buyers. If you are advertising on social media, for example, understanding psychographic details about your customers can be especially helpful in ensuring that you are targeting customers with the right sorts of behavioural traits.

However, the best customer segmentation models combine both demographic and psychographic data to build up valuable and meaningful profiles which help to improve marketing strategies. In their most refined form, these profiles become customer personas.

Customer personas

Customer personas are fully-rounded profiles of fictional customers of a brand or business. Each persona has characteristics – demographic and psychographic – identified through segmentation. It is normal to have more than one customer persona to reflect different segments of your customer base – three is in fact about average, though more or less than this is not unusual either. It very much depends upon the size and complexity of your business.

As their attributes as individuals are considered, insights emerge that could otherwise have been missed. Some aspect of your communications might suddenly be revealed as confusing, unnecessary or downright irritating. A product feature thought to be minor could turn out to be a significant driver behind buying decisions for a particular customer persona.

Marketing collateral that has customer personas in mind is more engaging, because it is created for a specific – if fictional – person. In the same way that real people change and grow, so too can customer personas develop as new data comes in and external factors, such as the state of the economy or developments in technology, change. Just as personas should be created from data, so too can data-needs be informed by personas – they help establish which of all those myriads of possible combinations are most likely to generate information valuable to a business.

More effective marketing strategies

Customer segmentation and customer personas are complementary to each other, and increase the depth of understanding businesses have of their customers, thereby leading to more effective marketing strategies. Each one adds a different aspect to the mix and is worth pursuing in its own right, but investing time and effort in both areas creates a whole that delivers much more than the sum of the two parts. Businesses that recognise this are normally much more successful in generating sales leads from their marketing activities. And, of course, it’s not just about generating leads from prospective customers. Customer segmentation and customer personas can also help a business to up-sell and cross-sell, as well making customers more loyal in nature, leading to ambassadorial recommendations and word of mouth referrals.

In fact, we would argue that establishing customer segments and customer personas is essential to the long-term success of any forward-thinking organisation driven by a sales and marketing culture.

Social Media Marketing

There are very few organisations that would not benefit from being active in social media marketing – and that includes start-ups and SMEs (small and medium sized enterprises), to whom this article is predominantly aimed. There is no one-size fits all solution when it comes to any form of marketing activity. Different companies have unique needs, and what is right for one, might be wrong for another. Getting the strategy right is, therefore, key. We must always remember that a digital marketing strategy forms part of an overall sales and marketing plan that works in conjunction with the strategic and creative brand proposition to deliver the financial objectives outlined in the business plan. This relationship cannot be stressed enough. All elements ought to be clearly aligned to ensure that an authentic strategy is created.